As fears that the effects of the debt crisis in Greece may migrate to other periphery nations in the Eurozone with battered registers, the European Parliament recently voted to back new rules that would severely restrict trading in credit default swaps (CDSs), including a ban on naked short selling. "It's becoming standard protocol in Europe to ban short selling every time there's a market fall. It happened before in Germany with equities and it's happening again now that the Greek debt crisis is spilling over into Italy," says Will Rhode, senior analyst at Tabb Group. "The regulatory perspective is to curb short selling to reduce speculative activity and, in turn, the speed and depth of a crash. This is a knee-jerk reaction that has unfolded over the course of the 18-month old Eurozone debt crisis."
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